Expert view: How long should long-term plans be?

Just how far ahead should a charity's finance strategy be aimed?

I have recently been, respectively, impressed and depressed by the following two examples of extreme long-term planning. First, there was the stately home that calculated that every century it would need a new roof and therefore decided to plant baby trees every 100 years to save itself the frighteningly expensive timber costs it would otherwise incur each time. The first batch was chopped down right on schedule. Then there is my brother-in-law, who has recently started pensions for his two children, aged five and three.

For much of a charity's financial strategy there is often so much unpredictable change that even a three-year plan quickly becomes out of date. However, the examples above are worth contemplation.

If you own property, you should have a discrete section in your finance strategy that takes a long-term view of property maintenance, development and succession planning. There will be a predictable life cycle for the majority of buildings' major elements. A three-year planning cycle is never going to cover everything.

Beyond the obvious list of capital-spend areas that I could rattle through, there are some other key areas that warrant an approach that goes beyond the next three years. For example, the most successful corporate fundraisers I have known have kept their own 10-year plans with multi-layered product life cycles and associated financials for maintaining their key corporate relationships. Central three-year strategic plans only ever take account of the first third of those plans.

If you currently survive on a hand-to-mouth basis on local authority funding, you might feel that planning anything beyond 12 months is a futile exercise. But ask yourself how many years you have been surviving in that way. Some charities have done so for decades.

As far as my brother-in-law goes, I waver between three thoughts: one, he has lost his marbles, as his kids are already showing signs of being on a fast track to Cambridge and it looks like a safe bet that they'll be able to sort their own pensions out in the not too distant future; two, if they do become impoverished, Britain will hopefully have sorted out the state pensions crisis in 60 years' time; and - when I'm feeling really pessimistic - three, they could die in any one of an assortment of ways between now and their 60th birthdays.

On the other hand, of course, he's giving them a huge step up in life and racking up tax credits for them along the way.

- Helen Verney is finance director at Jewish Care

Have you registered with us yet?

Register now to enjoy more articles and free email bulletins

Register
Already registered?
Sign in
Follow us on:

Latest Jobs

RSS Feed

Third Sector Insight

Sponsored webcasts, surveys and expert reports from Third Sector partners

Markel

Expert hub

Insurance advice from Markel

How bad can cyber crime really get: cyber fraud #1

Promotion from Markel

In the first of a series, we investigate the risks to charities from having flawed cyber security - and why we need to up our game...

Third Sector Logo

Get our bulletins. Read more articles. Join a growing community of Third Sector professionals

Register now